Costa Mesa’s Emulex Corp.’s acquisitions and market share gains should continue driving sales growth, according to a report from a Banc of America Securities analyst.
Analyst Scott Craig started coverage Wednesday of Emulex, a maker of electronics for data storage computers.
The company is set to get a boost from customers upgrading host bus adapters, a profitable bit of electronics that speeds up the flow of data on a network, according to the analyst’s report.
The positive report didn’t move investors,Emulex shares ended flat. The company had a recent market value of about $1.4 billion.
Craig set a price target of $22 share price and rated Emulex a “buy,” the report said. Shares now trade at about $16.
“We believe the host bus adapter market can grow in the mid-to-high single digits, even in a more challenging economic environment, as we are likely in currently,” Craig wrote in a note to clients.
Emulex said Wednesday it scored a design win for its host bus adapters with computer maker Hewlett-Packard Co.
Emulex’s adapters are set to be built into servers made by HP.
Emulex battles with Aliso Viejo-based QLogic Corp. for sales of host bus adapters. The two companies have more than 85% of the market.
